By Godfrey Benjamin

Edited by Marco T. Lanz

Jan 31, 2025 at 09:03 PM

Key Notes

• UBS is deepening its foothold in the tokenization ecosystem using blockchain.
• The Swiss giant has launched the UBS Key4 Gold on LayerZero.
• Banks are exploring blockchain potentials, showing the industry’s maturity.

UBS, a Swiss banking giant, is making bold moves in blockchain innovation. According to a report from CoinDesk, the financial institution recently completed a Proof-of-Concept for its UBS Key4 Gold offering on Ethereum’s layer-2 network, zkSync.

This test on the zkSync Network marks a growing trend among traditional financial institutions exploring blockchain’s potential. This initiative is designed for Swiss clients to invest fractionally in gold with real-time pricing and deep liquidity. It also offers secure storage and an option for physical delivery.

UBS Scaling Up with Zero-Knowledge Tech

For context, UBS Key4 Gold is a service offered by the banking giant that allows clients to buy and sell physical gold easily through their smartphones. With this service, clients own the physical gold securely stored in a UBS vault.

Transactions can be made conveniently from home, with options for both buying and selling. Additionally, clients can request physical delivery of their gold if desired. Notably, UBS is no stranger to blockchain experiments.

Coinspeaker reported that UBS had previously launched uMint, its tokenized money market investment fund built on the Ethereum network. With Key4 Gold, UBS is integrating blockchain into precious metal investments.

Related article: Deutsche Bank to Fix Regulatory Challenges for Institutions Using Public Blockchain

Meanwhile, UBS’ Key4 Gold already operates on its private blockchain, the UBS Gold Network. However, the bank has been searching for ways to scale the system while maintaining privacy. That search led the bank to zero-knowledge proofs (ZKPs), a cryptographic method that enhances transaction privacy and efficiency.

The successful test transaction suggests that UBS is considering layer-2 solutions for its financial products. However, the bank has yet to confirm whether it will fully adopt its layer-2 system.

A Broader Industry Trend

UBS is not alone in its blockchain exploration. UBS’s experiment with zkSync shows how traditional banks use blockchain. Major banks like JPMorgan, Citi, Deutsche Bank, and State Street are investing in blockchain for tokenization, payments, and digital asset services.

These institutions leverage this advanced technology to make their operations more efficient, secure, and scalable. Reportedly, Deutsche Bank announced plans to build its layer-2 network using zkSync’s technology. Beyond making their operational processes more efficient, blockchain innovations are now in very high demand globally.

Top firms are investing in distributed ledger technologies to gain the first mover advantage. With the UBS Key4 Gold, the Swiss giant is now catching up with its western counterparts.

Meanwhile, the crypto pivot is further proving that blockchain and traditional finance are converging. Coinspeaker previously reported that the bank once worked to resolve regulatory challenges for institutions using public blockchain networks. This was a major task aimed at ensuring compliance.

The increasing adoption of layer-2 solutions and zero-knowledge proofs suggests that blockchain is gradually becoming a fundamental part of institutional finance. The finance sector is evolving, and UBS’ move signals a potential shift toward more blockchain-powered banking solutions.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

Author Godfrey Benjamin

Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.

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Managing Editor Marco T. Lanz

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